Question

Exercise 10-7 useful life of 9 years. Actual miles driven were 13,800 in 2017 and 10,200 in 2018 Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. o.so.) Depreciation expense per mile Compute depreciation expense for 2017 and 2018 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining-balance method. (Round depreciation cost per unit to 2 decimal places, e.g. 0.50 and depreciation rate to 0 decimal places, e.g. 15%. Round final answers to 0 decimal places, e.g. 2,12 Depreciation Expense 2017 2018 (1) Straight-line method (2) Units of-sctivity method s (3) Declining-balance method

Answer 1

1	Straight line depreciation = (Cost of asset - salvage value )/ Life of the asset
	Depreciation expense = (33000-2000) /9	3444
	Depreciation expense
2017	3444*12/12	3,444
2018	3444*12/12	3,444
2	Double declining method
	Depreciation rate = [(cost of asset / life of asset ) / cost of asset ] *2
	Depreciation rate = [33000/9)/33000] *2
	Depreciation rate =	22%
	Depreciation = written down value * depreciation rate
	Depreciation expense
2017	Depreciation = 33000 * 22%	7333
2018	Depreciation = (33000-7333) *22%   =	5704
3	Units of production method
	Depreciation per item = (Cost of asset - salvage value )/ total miles
	Depreciation per item = (33000-2000 )/100000
	Depreciation per item	0.31
	Depreciation expense
2017	.31*13800	4278
2018	.31*10200	3162
	Journal entry
	Depreciation expense	3,444
	Accumulated depreciation truck		3,444
	Partial balance sheet
	Truck	33000
Less	Accumulated depreciation	3,444
		29,556